Abstract:

The performance evaluation of equity stocks plays a vital role in

investment decision-making, as it helps investors assess the financial health and profitability
of companies. This abstract presents an overview of a study conducted to evaluate the
performance of selected equity stocks at Sharekhan Ltd, a leading brokerage firm.
The objective of this study was to analyse the financial performance of the selected equity
stocks and provide insights to investors regarding their potential for returns and risks.
A comprehensive analysis of historical stock prices, financial statements, industry trends,
and market conditions was carried out using quantitative and qualitative research methods.
The selected equity stocks were carefully chosen based on their market capitalization,
sector diversification, and overall relevance in the market. The results of the study provided
investors with essential information regarding the relative performance and financial
stability of the chosen equity stocks. Moreover, the study explored the correlation between
the stocks' performance and macroeconomic factors, market trends, and industry dynamics.

10
 CHAPTER 01
INTRODUCTION

11
1.1 OVERVIEW OF THE TOPIC:
EQUITY STOCKS:
Every market is a meeting point of buyers and sellers.
Markets are all about transaction. somebody buys, somebody sells. In the equity market,
trading keeps on happening at an inconceivable speed. Investors are able to deal in
shares in a fraction of a second. Every day, thousands of crores worth of equities are
transacted in the equity market in India. However, you should gain some knowledge
before you venture into the equity market, If you're new to market. Plus, there are
different types of equity market and so you know about them as well.

Equity, generally referred to as shareholders' equity (or owner’s equity for privately
held companies), represents the amount of money that would be returned to a
company's shareholders if all of the assets were liquidated and all of the company's debt
was paid off in the case of liquidation. In the case of acquisition, it's the value of
company sales minus any liabilities owed by the company not transferred with the
sales.

CHARACTERSTICS OF INVESTING IN EQUITY SHARES:

When investing, it's critical to be aware of your risk appetite
and accordingly, balance the amount of risk involved in your investments. Equity is an
asset class that offers great eventuality in maximizing returns. still, you must be willing
to take on the needed threat which can range anywhere from moderate to high.
piecemeal from the essential threat of investment, multiple factors discourage people
from investing in the stock request. You must study the request constantly and also
make similar fiscal opinions. Endured and amateur investors have made significant
earnings with due fiscal planning and investing, especially in equity. There are
multitudinous avenues available to you to invest in equities – collective finances, duty-
saving equity- linked savings schemes ELSS, or investing directly in stocks. India has
seen a growing interest from investors in equity. So, why is everyone dipping their
bottom into this parlous affair? There sure are benefits of investing in equity that you
should know about.

12
 a) OWNERSHIP:
Investing in shares of a company makes you a shareholder or
a member of the company. In simple terms, you get ownership of the company and can
exercise control. As an investor, you would enjoy a share of the income earned by the
company. Additionally, you would also get voting rights in the company.

b) HIGHER RETURN:
The primary advantage of investing in equity is that it can
generate high returns in a short time in comparison to other investment options like
Bank FDs. Presently, the equity market is reaching each- time highs as it recovers from
the Covid- 19 setback of 2020. With applicable stock picks and a solid trading strategy,
the stock request can potentially give you with unapparelled returns going forward.

c) DIVIDEND:
One of the benefits of investing in equity is that it offers
returns in not just one, but two forms — capital appreciation and dividend income. A
dividend is a distribution of surplus gains by a company to its shareholders. Dividend
income is basically an additional income to the investor.

d) LIMITED LIABILITY:
There's always a risk of adversity when it comes to
companies such as bankruptcy or operational losses. however, your liability as a
shareholder or investor is confined to the amount of investment you ’ve made, and not a
penny more.

e) LIQUIDITY:
Stocks are generally considered liquid assets. The shares can
very easily transfer ownership. The average daily volume of deals on NSE and BSE is
considerably high. This means several buyers and sellers are participating in the market
at any given point of the day.

f) BEAT INFLATION AND FACILITATE WEALTH CREATION:

13
 Inflation is one of the major constraints to wealth creation.
The rate of return on your investment should ideally be higher than the inflation rate.
The inverse case would result in wealth erosion. Investing in equities allows you to earn
a high return rate that can potentially beat the inflation rate by a large margin. This is
how equities facilitates wealth creation in the long term. History is proof, stock index
has constantly outperformed return on debt and other investments instruments in the
long term.

g) PROTECTION BY SEBI:
In India, the stock market is regulated by the Securities and
Exchange Board of India (SEBI). Amongst other functions, the regulatory framework
created by SEBI is responsible for protecting the rights of all investors. SEBI has been
instrumenting in reducing the arrival of fraudulent conditioning by companies or
individualities.

h) RIGHT SAHRES AND BONUS SHARE:

When a company requires additional capital, it can issue
‘rights shares. A right issue ensures the preservation of ownership and control of
existing shareholders, and they receive priority to invest, over other investors. Right
shares are issued at a price lower than the market price of the company’s share. So,
existing investors can take up this advantage or else renounce such rights.
Sometimes companies decide to issue bonus shares to their shareholders. Bonus shares
are basically free shares that are given to existing shareholders. frequently, bonus
shares are issued rather of dividend.

i) FLEXIBILITY:
An investor looking to make an entry into the stock market
can start with a rather small investment. Purchasing the stock of small- cap or mid-cap
companies in similar units would be the apt way forward. Another great benefit of
investing in equity is that you can buy, sell or hold shares whenever and for still long
you prefer.

j) TAX ADVANTAGES:
14
 Equity investments offer tax benefits. Long- term capital
earnings (LTCG) up to Rs. 1 lakh from equity investments are exempt from duty. else,
LTCG of above Rs. 1 lakh is tested at 10%. Short- term capital gains (STCG) from equity
investments are tested at 15%. The return earned on debt or gold invites a advanced
duty obligation than equities do.

k) DEVERSIFIED INVESTMENT:
A general rule for investing is to diversify. The common
adage is – “don’t put all your eggs in one basket”. Diversification helps reduce risk
attention associated with a particular investment instrument. Equity investments deliver
an acute edge by diversification. Stock market fluctuation are independent of other
investments similar as bonds and real estate. Adding stock to your portfolio means
lesser threat but it also delivers sizable and rapid-fire earnings. This can also help you,
as an investor, to avoid exorbitantly conservative investment strategies .

l) VOTING RIGHT:
Equity shareholders have the right to decide how the
company is operated, including electing the right people to run the company. A
company that has effective operation delivers better revenue and higher dividend for its
shareholders.

TYPES OF EQUITYB STOCKS:

I. ORDINARY STOCKS:
Such shares are issued by a company to procure fund to meet
long- term charges borne by a business. They've associated ownership benefits
provided to an investor, wherein the individual earnings exposure to various
management segment involved in running operations. An individual enjoying a large
number of these types of equity shares have substantial voting rights.

II. PREFENCE SHARE:

15
 Unlike ordinary equity shares, owners of this category of
shares have no voting or ownership rights. still, when you invest in preference shares,
there's a cumulative dividend payment guarantee before the distribution of profits
among ordinary shareholders.
There are two sub-categories of preference shares:
▪ Participating Preference Shares: As an owner of this category of equity shares,
you'll enjoy a share of the profits, including bonus shares.
▪ Non-Participating Preference Shares: You do not get a share of profits or
ordinary shares in this category.

III. BONUS SHARE:

Bonus shares are additional equity shares issued to existing
shareholders to distribute profits. These shares are issued free of cost, and the market
capitalization or the total number of shares x market price remains the same. For
example, if a company decides to issue bonus shares in the rate of 2:1, also if you hold
1000 shares, you're eligible for a bonus of 500 shares. The total number of shares goes
up, and the market price per share goes down since there's no corresponding rise in the
market price.

IV. RIGHT SHARES:

Unlike bonus shares, right shares are offered to a company's
existing shareholders at a discounted rate. This is a limited- period offer, and rights
shares are issued to help the company meet its charges.

V. SWEAT SHARE:
Directors and workers of a company admit sweat equity
shares. They get the shares at a reduction for their excellent work in furnishing
intellectual property rights, know- how, or value additions to the company.

VI. EMPLOYEE STOCK OPTION (ESOPs):

A company gives ESOPs to its workers as an incitement and
as a retention strategy. workers are given the option to buy shares at a destined price at

16
 a future date under the terms of an ESOP. workers and directors who exercise their
ESOP entitlement option admit these shares .

VII. VOTING AND NON-VOTING RIGHT:

Generally, most types of equity shares carry vote rights
because of the stake in power it entails. still, in some cases, companies can issue shares
with the condition that it'll confer differential or no voting right at all to similar
shareholders. For case, in 2008, Tata Motors issued ‘A’ shares with the condition that 10
similar shares will equate to one vote. That’s the differential voting right. still, it perked
up share in profit by 5 for similar stocks compared to its ordinary counterpart.

VIII. AUTHORISED SHARE CAPITAL:

Every public limited company needs to mention an
authorised share capital amount in its Memorandum of Association. similar amount is
the extent of capital that a company can raise by issuing equity shares. still, companies
can increase the authorised share capital amount through a host of lawfulness.

IX. ISSUED SHARE CAPITAL:

It denotes the nominal value of all shares that a company has
issued. For case, if the nominal value of one stock is Rs. 100 and a company has issued
20,000 similar shares, also its issued share capital will be Rs. 20 lakhs.

X. SUBSCRIBED SHARE CAPITAL:

It refers to that part of issued capital to which investors have
subscribed. pertaining to the illustration, in case investors have bought 15,000 shares of
that company, also its subscribed capital would be Rs. 15lakh.However, also issued and
subscribed equity shall be the same, if investors buy all the stocks that a company has
issued.

XI. PAID UP CAPITAL:

The amount of money investors pay against its holdings of
a company’s stock is its paid- up capital. generally, shareholders pay the entire amount

17
at one go, and thus, subscribed and paid- up equity relate to a single amount. likewise, if
a stock is trading at a premium, also that excess amount is accounted as shares
premium.

ADVANTAGE OF EQUITY STOCKS:

A. POTENTIAL TO EARN A HIGH REWARD:

Although equity shares entail an array of high-risk factors,
they generally come with a greater return potentially. In addition to earning via capital
appreciation on account of rise in share price, when a company earns profit, its
investors might get cash or kind dividend tips pay- outs.

B. PROVIDES CREDITWORTHINESS:
When an investor owns equity shares of a firm, it can act as
collateral on various loans as per requirement. These shares reflect the
creditworthiness of a firm and can help the shareholder get quick approval of loans.

C. INVESTMENT IS HIGHLY LIQUID:

A pivotal factor which an investor should take into account
before investing in any fiscal instrument is liquidity. This liquidity is the ease with which
an investor can convert an investment into cash. In this regard, equity shares are largely
liquid and can fluently be vended in the capital request. therefore, in case of an
emergency, an investor can liquidate equity shares with lesser ease.

D. DIVERSIFICATION OF INVESTMENT PORTFOLIO:

Diversification offers exposure to equities of various sectors
and helps produce a balanced portfolio for the investor in terms of threat and return.
Investors can diversify their portfolios by investing across equities from various sectors
or industry.

E. AN EASY AND EFFICIENT WAY OF INVESTMENT:

18
 Any individually can easily invest in the equity request by
serving the services of a stockbroker. All an investor requires to invest in equity of any
company of his/ her choice is a Demat account. A Demat account enables an effective and
easy way of trading equity instruments.

F. DIVIDEND AND PROFIT:

Equity shares generally give dividend to the shareholders.
The company distributes a portion of its earnings to investors and any financial benefit
realized by maintaining or selling these assets. thus, you must precisely review all the
financial accounts to determine how important of a return you'll admit when investing
in equity shares. Flash back that not all businesses pay tips, so bear that when opting
which stock shares to buy.

G. SOURCES OF FIXED CAPITAL:

Equity capital is permanent capital because it is repaid only
when a company is liquidated. It provides a buffer for creditors in the event of a
company’s insolvency because it is listed last on the list of claims.

H. NO CHARGE ON ASSET:
Finances can be raised through an equity issue without
placing a charge on the company’s current assets. However, a company may freely
mortgage its assets in exchange to obtain financing.

I. NO TERMS:
Equity instruments aren't subject to any term, so you can hold
them for 10 minutes or 40 years, depending on your investment goal and objects.

J. PERMANENT SOURCES OF INVESTMENT:

Equity shares are a permanent source of finance. It can be
used for long term financial need such as procurement of fixed assets.

K. LESS COST OF CAPITAL:

19
 Equity shares are a very good source of finance for the
company as they consist of less cost of capital compared to other sources of finance.

L. NO REPAYMENT REQUIREMENT:
When you use equity capital, you have no obligation to make
interest payments or to repay equity investors original investment. Debt capital, on the
other hand, requires periodic interest payments and repayment of the borrowed capital.
Although you might distribute some of your profits as dividends to equity holders, you
can skip these payments if necessary. This advantage helps your small business keep
further of its profits and allows further spending inflexibility.

DIADVANTAGE OF EQUITY SHARE:

1. DIVIDEND:
A shareholder's dividend payment is neither set nor subject
to investor control. The amount of the dividend is decided by the company's operation.
A dividend is guaranteed in the event of a loss. Investors will get a dividend if there's a
profit once the board of directors suggests one.

2. HIGH RISK:
Investing in equity shares is riskier than other investments,
similar as loans. Funding opinions are made based on an investor's trust in the business.
Any collateral doesn't secure it. similar shares hold no interest for investors seeking
safe, fixed- income investments.

3. PRICE FLUCTUATION IN THE MARKET:

Any equity share's market price might vary tremendously.
Booking market profits is always challenging. On the other hand, the chances of losing are
equal.

4. LIMITED CONTROL:

20
 As a small shareholder in the firm, an equity investor has
little opportunity to use their voting rights to impact the company's policies.

5. IF YOU STOP INVSTING, YOU LOSE YOUR OWNERSHIP INTEREST

IN THE FIRM:
A shareholder will stop getting dividend if they cannot keep
purchasing equity shares for whatever reason, similar as fiscal constraints or personal
issues. These investors may ultimately be forced to sell their assets. Investors may suffer
significant losses if this occurs before a liquidity event (like an IPO).

6. LOSS OF INVESTMENT:
You might lose money if you invested in an equity share. This
occurs when shareholders are compelled to sell their shares before they can find a
buyer, meaning whoever purchased those shares would also retain a portion of the
company and be eligible to receive the assets. However, you risk losing your money and
any future dividend payments and profit- sharing from the company.

7. RISK OF FLUTUCATING RETURNS:

Due to the fluctuating returns on equity shares, investors

looking to find a harmonious income may not prefer equity shares.

8. IRREDEEMABLE:
Equity shares cannot be redeemed during the lifetime of the
business.

9. MARKET VOLATILITY:
The stock market can be very volatility, with prices
fluctuation rapidly in response to news and events. This can make it difficult to predict
how a stock will perform in the short term.

10. MARKET SATURATION:

21
 There are thousands of publicly traded companies to choose
from, making it difficult to know which stocks to invest in. This can lead to a sense of
market saturation and analysis paralysis.

11. DANAGER OF OVER-CAPITALSATION:

Equity share capital is a permanent source of capital. So, if

due to poor financial planning, a company raises excess equity capital, it may get over-
capitalised and the equity capital may remain underutilised and idle.

FORMULA TO CALCULATE SHAREHOLDER’S EQUITY:

Shareholders’ Equity=Total Assets−Total Liabilities

PERFORMANCE EVALUATION OF EQUITY STOCKS:

This study aims to evaluate the performance of selected equity

stocks at Sharekhan Ltd. Sharekhan Ltd. is a leading brokerage firm that provides online
trading services to investors. The selected equity stocks represent a diverse range of
industries and have different risk profiles. The study utilizes various performance evaluation
metrics, including Return on Investment (ROI), Risk-adjusted Return (RAR), and the Sharpe
Ratio, to assess the financial performance and risk associated with these stocks. The findings
of this study will provide valuable insights for investors and help them make informed
investment decisions.
Sharekhan Ltd. is known for its reliable investment services and is frequently chosen by
investors for trading activities. Evaluating the performance of equity stocks is crucial for
investors as it allows them to understand the profitability and risks associated with their

22
investments. This study aims to analyse the financial performance of selected equity stocks
through various performance evaluation metrics.
The study uses historical stock price data for the selected equity stocks and calculates the
ROI over a specific time period. The ROI is a fundamental metric to assess the profitability of
an investment. Additionally, the study employs RAR, which considers the risk associated
with the investment, and the Sharpe Ratio, which measures the risk-adjusted return, to gain
deeper insights into the stock performance. The data is collected and analysed using
statistical tools and techniques.

The historical stock price data for the selected equity stocks is collected from reliable
sources such as financial databases and trading platforms. The data includes the opening,
closing, high, and low prices, as well as the trading volume for each stock over the selected
time period.
The findings of this study indicate that certain equity stocks have outperformed others in
terms of ROI and risk-adjusted returns. This suggests that these stocks have provided higher
profitability while considering the associated risk. The analysis also reveals that some stocks
have exhibited relatively lower returns, indicating the need for further investigation into the
factors affecting their performance.
This study has several limitations. Firstly, it relies on historical stock price data, which may
not accurately reflect future performance. Secondly, the analysis does not consider
qualitative factors such as industry trends, company news, or market conditions, which
could impact stock performance. Lastly, the study focuses on a specific time period, and the
results may not be generalized to other time periods or market conditions.
This study provides an evaluation of the performance of selected equity stocks at Sharekhan
Ltd. through various performance evaluation metrics. The results help investors better
understand the profitability and risk associated with these stocks. It is recommended that
investors take these findings as a reference while making investment decisions. However, it
is crucial to consider these results in conjunction with qualitative factors and a
comprehensive market analysis to mitigate risks and maximize returns.

23
 Overall, this study contributes to the existing literature on
performance evaluation and serves as a valuable resource for investors seeking insights into
equity stock performance at Sharekhan Ltd. It is hoped that this research will stimulate
further investigation into the factors influencing equity stock performance and enhance
investment decision-making processes.

SELECTED EQUITY STOCKS ARE:

1) TCS LTD.
2) TATA LTD.
3) HDFC LTD.
4) BHARTHI AIRTEL.
5) HINDUSTAN UNILEVER LTD.
6) INFSOYS TECHNOLOGIES.

24
1.2 THEORETICAL BACKGROUND OF THE STUDY:

RETURN ON EQUITY STOCKS:

Return on equity (ROE) is a measure of financial
performance calculated by dividing net income by shareholders' equity. Because
shareholders' equity is equal to a company’s assets minus its debt, ROE is considered the
return on net assets. ROE is considered a hand of a corporation's profitability and how
effective it's in generating profits. The advanced the ROE, the more effective a
company's operation is at generating income and growth from its equity financing.
The return on equity (ROE) is a financial ratio that measures the profitability and
efficiency of a company in generating profits from its shareholders' equity. It indicates
how well a company is utilizing its equity to generate returns for its shareholders. To
calculate the return on equity for stocks, you can follow these steps:

1. Identify the relevant financial information:

Start by gathering the necessary financial data. You will need
the net income and shareholders' equity figures, which can be found in a company's
financial statements such as the income statement and balance sheet. The annual or
trailing twelve-month (TTM) figures are commonly used.

2. Calculate the net income:

Obtain the net income figure from the income statement.
This represents the profits earned by the company after deducting all expenses and
taxes.

3. Determine the shareholders' equity:

Find the shareholders' equity figure from the balance sheet.
Shareholders' equity refers to the net assets owned by the company's shareholders. It
can be calculated by subtracting the total liabilities from the total assets.

4. Calculate the return on equity:

25
 Use the following formula to calculate ROE:
Multiply the result by 100 to express it as a percentage.

ROE = (Net Income / Shareholders' Equity) * 100

It's important to note that the ROE provides a snapshot of a

company's profitability and efficiency at a specific point in time. It's also valuable to
compare the ROE of a company with its peers or industry average to gain further
insights into its performance.
Now, let us understand the terms of the below equation in detail.

1. Annual Net Income:

The net income is the bottom- line profit of a company. It can
be attained from the company's Income Statement for the year under consideration. It's
arrived at by deducting the operational expenses, interests, and taxes from the annual
revenue.0The formula can be written as

Net income = Gross revenue- expenses (inclusive of interest expenses for

outstanding debts)- taxes.

2. Total Shareholder's Equity:

Shareholder's Equity is an investor or shareholder's claim
over the company's assets after adjusting liabilities. It can be attained from the
company's balance sheet using the following simple formula:

26
 Total Shareholder's Equity = Total assets - total liabilities.

It's essential to understand that there will be a slight

mismatch in the equity value between the income statement and the balance distance
to overcome this, it's judicious to use the average Equity over the period considered.
For a more intuitive understanding, the Return on Equity formula can be seen as a
product of Return On assets (ROA) and fiscal influence. Return On means will be the
rate between net income and total means in such a case. fiscal influence will be the rate
between total means and total shareholder's Equity. The below system of expressing
Return on Equity gives the investor an understanding that both ROA and fiscal
influence are functions of ROE.

MEAN:
Mean is also known as computation mean or fine normal.
Calculating the normal from a set of figures requires at least 2 figures. This form of
normal is extensively used in both scientific computation and statistical memorandum.
The mean is a useful tool for understanding and assaying data sets. It's frequently used
in statistical analysis and in fine modelling. The mean can help you to identify trends and
patterns in data sets.
It is used to calculate the average returns of stocks by using the formula.

Mean =∑𝑅/n

Where R is return of Stock.

R = (Closing price – Opening price)/ Opening price * 100
Average, A =∑𝑅/ 𝑛 ;
Where n= number of years.

27
RISK ON EQUITY STOCKS:
Calculating the risk of equity stocks involves assessing the
volatility and potential losses associated with their prices. While it is impossible to
predict with certainty what will happen in the stock market, there are several tools and
measures you can use to estimate risk. Here are a few commonly used methods:

1. Standard Deviation:
This measure calculates the variability of a stock's returns
over a specific period. A higher standard deviation indicates higher volatility and
therefore higher risk.

2. Beta Coefficient:
Beta measures the sensitivity of a stock's price movements
relative to the overall market. A beta of 1 indicates that the stock's price moves in line
with the market, while a beta above 1 signifies a higher degree of volatility.

3. Historical Price Analysis:

Examining the past performance of stocks can offer insights
into their potential risk. Historical price charts, trends, and patterns can be indicators of
the stock's volatility and potential downside risk.

4. Fundamental Analysis:
Assessing a company's financial health, earnings prospects,
industry outlook, and management quality can help gauge the risk associated with its
stock. Factors such as debt levels, cash flows, and competitive position are important
considerations.

5. Diversification:
Spreading your investments across different stocks and
sectors can mitigate risk. By creating a diversified portfolio, you reduce the impact of
individual stock price movements on your overall portfolio.

28
It's worth noting that these methods are not foolproof, and investing always carries
some level of risk. It is important to carefully evaluate and understand the risks
involved in any investment decision and consult with a qualified financial advisor if
needed.

STANDAED DEVIATION:
Standard deviation is a statistical measure that is commonly
used to quantify the risk or volatility of equity stocks. It provides an indication of how
spread out the returns of a particular stock are from the mean or average return. By
calculating the standard deviation, investors can assess the potential range of returns
and measure the degree of uncertainty associated with an investment.

To calculate the standard deviation of equity stocks, the following steps are typically
followed:

1. Gather historical stock price data:

Obtain a dataset consisting of historical stock prices for the
desired time period. The more data points available, the more accurate the calculation
will be.

2. Calculate the returns:

Calculate the periodic returns for each data point by
subtracting the current price from the previous price and dividing it by the previous
price. This step provides a measure of the percentage change in stock price over time.

3. Calculate the average return:

Find the mean or average return by summing up all the
returns and dividing it by the total number of returns in the dataset.

4. Calculate the deviations from the average:

29
 For each individual return, subtract the average return
calculated in the previous step. These deviations measure how far each return
deviates from the average.

5. Square the deviations:

Square each of the deviations calculated in the previous step.
This step ensures that the deviations are positive values and avoids cancelling out
positive and negative deviations.

6. Calculate the variance:

Find the average of the squared deviations by summing
them up and dividing by the total number of returns. The variance represents the
average deviation from the mean.

7. Calculate the standard deviation:

Take the square root of the variance calculated in the
previous step to obtain the standard deviation. This step provides a measure of the
dispersion or volatility of the stock returns.
By evaluating the standard deviation of different stocks, investors can compare the
level of risk associated with each stock. Stocks with higher standard deviations are
generally considered riskier, as they exhibit more significant price fluctuations and have
a wider potential range of returns. Conversely, stocks with lower standard deviations
are typically considered less risky.
It is important for investors to consider not only the standard deviation but also other
factors, such as the company's financial health, industry dynamics, and market
conditions when assessing the risk of equity stocks and making investment decisions.
It is used to calculate the risk, if standard deviation is more, then risk is also more.

Variance (V) = ∑(𝑅−𝐴)2/ (N)

30
 Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒

BETA AS A MEASURES OF RISK ON EQUITY STOCKS:

Beta is a measure of the sensitivity or volatility of a particular
stock relative to the overall market. It assists investors in understanding how a stock's
price movement correlates with changes in the broader market.

A beta value greater than 1 indicates that the stock tends to be more volatile than the
market. If the market experiences a 10% increase, a stock with a beta of 1.5 might be
expected to increase by 15%. On the other hand, a beta value below 1 suggests that the
stock is less volatile than the market. For instance, a stock with a beta of 0.75 would be
anticipated to move 7.5% for every 10% market movement.

A beta value of 1 means that the stock is expected to move in line with the market. It
indicates a neutral correlation, implying that the stock's price fluctuates proportionally
with the market.

Investors often consider beta when assessing the risk associated with a particular stock.
Higher-beta stocks typically have greater price swings and are deemed riskier.
Conversely, lower-beta stocks tend to be more stable and are considered less risky.
Nonetheless, it is important to note that beta is just one factor to be considered among
many when evaluating a stock's potential risks and returns.

β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

31
SHARPE RATIO:
The Sharpe ratio is the average return earned in excess of
the threat-free rate per unit of volatility or total threat. Abating the threat-free rate from
the mean return, the performance associated with threat- taking conditioning can be
insulated. One suspicion of this computation is that a portfolio engaging in “zero threat”
investment, similar as the purchase of U.S. Treasury bills (for which the anticipated
return is the threat-free rate), has a Sharpe rate of exactly zero. Generally, the lesser the
value of the Sharpe rate, the more seductive the threat- acclimated return.
The Sharpe ratio is a commonly used metric in finance to measure the risk-adjusted
return of an investment. It was developed by Nobel laureate William F. Sharpe and is
calculated as follows:
In the context of equity stocks, the return refers to the average rate of return achieved
by the stock over a specified time period. The risk-free rate represents the return on a
riskless investment, such as a Treasury bond, which is typically used as a benchmark for
a risk-free return.
The standard deviation of the stock's returns measures the volatility or variability of its
performance. A higher standard deviation indicates greater price fluctuations, which
implies higher risk.
The Sharpe ratio allows investors to evaluate the excess return generated by a stock per
unit of volatility taken. A higher Sharpe ratio indicates a better risk-adjusted return and
is generally preferred.

It's important to note that the Sharpe ratio is just one metric used to assess investment
performance, and it has some limitations. For instance, it assumes that stock returns are
normally distributed and that the risk-free rate remains constant. Additionally, the
Sharpe ratio does not capture all types of risk, such as systemic or tail risks. Therefore,
it's advisable to consider other factors and metrics when making investment decisions.

Sharpe ratio = Average returns – Risk free rate

Standard deviation

32
1.3 EXPLANATION FOR RELATED CONCEPT OF SELECTED RESEARCH:

The selected research topic focuses on the performance

evaluation of equity stocks at Sharekhan Ltd. Performance evaluation is a crucial aspect
of investment decision-making, as it helps assess the profitability and growth potential
of selected stocks have outperformed or underperformed the market, thus aiding in the
evaluation of their potential for future returns.

Additionally, a qualitative analysis will be included to consider factors beyond financial

metrics. This may involve analysing market trends, industry dynamics, competitive
advantages, and company-specific events that could influence the stocks' performance.

The findings of this research will contribute to a comprehensive understanding of the

selected equity stocks' performance at Sharekhan Ltd. It will help investors make
informed decisions about their investment portfolios, identify potential investment
opportunities, and mitigate risks associated with equity investments.

Overall, the performance evaluation of selected equity stocks at Sharekhan Ltd. is a vital
research topic that provides valuable insights into the financial strength and growth
potential of these stocks. This research will benefit investors, analysts, and anyone
interested in understanding the performance dynamics of equity stocks from a
respected brokerage firm like Sharekhan Ltd.

33
 CHAPTER – 2
ORGANIZATION PROFILE:

34
2.1 INDUSTRY PROFILE:
Stock exchange Was from the early stage of human society.
Development of these process led to the outcome of trading and money, then a new
social class was formed called as traders which lead to the existence of investments,
stock exchange, speculator, capital, investors and interposers etc.
India has the record of Stock market for about 140 years which facilitated for the
growth and development of industry as well as the economy of the country. The stock
market is an open market for trading of securities from those who have it to those who
are in need of it. It helps in raising the additional capital requirement; the main function
of the stock market is to facilitate the transfer of funds or securities from the surplus
lenders to the deficit areas. It’s recognised as one of the most important parts in the
global market. Most of the country’s profitable condition and growth depends upon the
stock market.

2.1.1 STOCK EXCHANGE:

Stock exchange is a place or platform where the stock brokers
and traders can purchase and sell the various shares, bonds and other securities of the
company. Many of the company have their stocks listed in the Securities Exchange Board of
India, trading in such stocks and securities are considered to be most secure and also less
risky as those are listed in the SEBI which has good control and also conduct periodic
inspection. More of the liquid securities attract a greater number of investors.
It also refers to as collection of various markets and exchanges which conduct basic
transaction such as buying and selling of securities and financial instruments in the initial
stages, initial public offerings are made in primary market and further dealings are made in
secondary market. Stock exchange is the most important investment avenue in today’s era.

SECURITIES EXCHNGE BOARD OF INDIA (SEBI):

SEBI was established in the year 1992 on April 12th in accordance
with the provision of Securities Exchange Board of India Act 1992. It was established to
protect the interest of the investors and also to promote and develop the securities market
at large. At the initial stage SEBI was a non-statutory body without any statutory power

35
however, through the amendment of SEBT Act 1992 it was given with additional statutory
power. It has its headquarters located in Mumbai.

2.1.2 OBJECTIVES AND FUNCTIONS OF SEBI:

• To protect the interest of the investors.
• To provide healthy investment avenue.
• In order to prevent malpractice and fraudulent activities.
• To develop fair trade practices.
• In order to prevent insider trading.
• Create awareness among the investors.
• To design proper code of conduct and guidelines for proper functioning of financial
companies.
• To promote the investors education and training.
• To register and regulate the functioning of depository as well as stock brokers, sub-
brokers and merchant bankers.
• To conduct research and develop improvement.

2.1.3 LIST OF STOCK ECXCHANGE IN INDIA:

1. BOMBAY STOCK EXCHANGE(BSE).
2. NATIONAL STOCK EXCHANGE(NSE).

BOMBAY STOCK EXCHANGE (BSE):

36
 BSE is one of the important Indian stock exchanges located at
Dalal Street, Mumbai. It got established on 1875 it is the Asia’s first stock exchange market,
now it is world’s 10th largest stock exchange it contains the capital of about 150184.87
billion it is one of the oldest stock exchange boards of India.
The earlier broker meetings were held and conducted under a banyan tree and as the time
passed the number of stock brokers got increased gradually, hence they have left with no
choice but to choose a new allocation for trading then they established a permanent place
to conduct meetings as well as trading of stock in Dalal street Mumbai and named it as BSE
Bombay Stock Exchange. It got recognised by the government of India under an act called as
securities contractual act of 1980 then the BSE got a milestone and transformed into BOLT
(BSE online trading).

NATOINAL STOCK EXCHANGE:

It’s one of the leading stock exchanges that exist in India, it’s
located in Mumbai. It was established as the first electronic exchange in the country in
the year 1992 it was the prior exchange which facilitated the modern fully automated
electronic screen-based trading system.
It came most popular with the preface of NIFTY 50. It was used mostly among all the
Indian investors and it’s also treated and considered as the mark each around the world.
It’s using one of the tremendous technologies as it receives further than billon messages
every day all of them should be clarified and given the conclusions and do get answered

37
if no, also it creates huge consequences on investors. It commenced its operations from
1994 with the new launch of cash request as well as whole trade debt market, it also
entered into global trading index namely S&P and DOW JONES.

2.1.4 LIST OF TOPS 10BROKERAGE FIRMS IN INDIA:

RANKS NAME OF THE FIRM

01 India bulls

02 Sharekhan ltd

03 Angel brokering ltd

04 Reliance money

05 Kotak securities ltd

06 Indian Infoline service

07 HDFC securities

08 ICICI direct

09 Bajaj capital

10 Aditya Birla

38
2.2 INTRODUCTION TO THE ORGANIZATION:

It was an excellent opportunity to work in ShareKhan Pvt

Ltd. Design affords factual world understanding to those lacking to discover or increase
the applicable information and ability, essential to arrive into a specific carrier field.
During my internship I learnt many things, did an analysis of various competition of
Sharekhan as my companion supported me all the tasks well it’s the main reason to get
some knowledge about various things and complete project more successfully. My work
in the company was to open a D- mat account and call the customer and convenience
them to trade and purchase shares through opening of D- mat account.
It was a wonderful of mine in working with Share khan limited. All the theoretical
aspects thought in the college were given a practical exposure by applying all the
information in various process and practices of the organisation.
The project provides a good opportunity in making a student well knowledgeable and
helps them to get a good job after the college life without huge struggle. Finally, it was a
great experience and a good opportunity in knowing the functional effectiveness,
multiple growths and also to know how to manage up with competition at Share khan
limited.

2.2.1 COMPANY PROFILES:

39
 Established in 1922, Sharekhan is a full- service stock broker in
India. It offers stock request trading and investment to investors in India. The company also
offers NRI investment services online as well as through its branch services in the UAE and
Oman. Sharekhan was innovated by Mumbai- based entrepreneur Shripal Morakhia in 2000.
Sharekhan pioneered the online retail brokerage industry and leveraged on the first wave of
digitization, when dematerialization (demat) of securities came into effect and electronic
trading was introduced in the stock exchanges. Sharekhan was acquired by BNP Paribas in
2016. It runs as a wholly- possessed attachment of BNP Paribas. BNP Paribas S.A. is a leading
bank in Europe. Sharekhan is now a fully owned subsidiary of BNP Paribas and after the
acquisition it was rebranded as Sharekhan by BNP Paribas. Sharekhan is present in over 575
cities through 153 branches, and more than 2,500 business partners. The company has a 1.4
million customer base and, on an average, executes more than 4 lakh trades per day. It’s
listed in Euronext Paris, France’s securities markets. Sharekhan offers retail broking services
in equity, commodity and currency segments, IPOs financing, portfolio management
services, wealth management, securities brokerage, loan against shares, and mutual fund
distribution. The company also offers research and stock recommendations to its customer.
The online trading services are offered through the following platforms-

• Sharekhan App (Mobile Trading)

• Sharekhan Website (Website Trading)
• TradeTiger (Trading Terminal)

Customer can also trade offline by visiting any of the Sharekhan offices spread in 634 cities
across India. In addition, it also offers Call & Trade services wherein you can place orders on
the phone.

The below services are backed by quality investment advice from an educated
exploration platoon which offers investment and trading ideas grounded on
abecedarian & specialized exploration, request related news, statistical information on
equities, goods, collective finances, IPOs and much further. Sharekhan is member of the
Bombay Stock Exchange, National Stock Exchange and the country’s two leading

40
commodity exchanges, the NCDEX and MCX. It’s also registered as a repository party
with National Securities Depository and Central Depository Services.
Sharekhan has established category leadership through pioneering initiatives like Trade
Tiger, an internet-based application that emulates a broker terminal besides providing
information and tools relevant to day traders. Another initiative First Step is targeted at
empowering first-time investors. It has also set its global footprint through the “India
First” initiative, a series of seminars conducted by Sharekhan to help the Non-resident
Indians participate and benefit from the huge investment opportunities India.
The activities in the capital market started in the year 1987 as a brokerage house for
investors and market making in select scripts and extended to financial intermediation
activities in money, capital and currency markets. Later, the group diversified into
development of databases, back-office application for banks and distribution and
portfolio management. The company also provides guidance to the investors through
seminars and regular research publication.

SHAREKHAN LIMITED is running successfully since 1922. In the country it’s recognised
as the stylish stock broking company and best house of SSKI groups. It’s a retail broking
company of SS Kanthilal Ishwarlal Investors Services private limited. It was farther
promoted by MR. Sripal S and MR. Shreyas S and got established in 1925. In this firm
online trading can be done through www.sharekhan.com and it was established in 2000
and it facilitates accessible sale of finances and securities online each across the globe.
This point is well known for its stoner friendly language, effective services, high and
quality exploration conduction it has its participation whew over one lakh people trade
in this site online.

SHAREKHAN has over 8decades of experience in the stock broking field, it’s famous and
well known for its diversified offerings of securities and products to its traders, it also
includes trade execution on BSE and NSE, online trading, derivatives. It provides
guidelines and advices regarding which is the best place and product to make
investment with, which can yield more of the returns with minimum investment. It
facilitates for the proper allocation of money in a productive manner. It’s India’s largest
broking house in the current scenario it has the participation in NSDL and CSDL.

41
SHAREKHAN has the network of above 331 centres in 124 cities in India which provide
various facility installation including retail trading services. It has a huge belief to make
investment in technology for the improvement and growth of the business. The majority
of the stake in the company is held by Morakhiya family. It was established in 1925 it
has the headquarters in Mumbai which contains above 3500 employees.
SHAREKHAN is one of the top service providers companies in India. It contains huge
number of services such as investment avenue, solution in derivations, mutual funds,
equities, investment advices and it also give helping hand in depository and portfolio
management.

2.2.2 PROMTERS OF THE COMPANY:

Shripal Morakhia: Founder

of
Sharekhan

Jaideep Arora – CEO

42
 Shankar Vailaya: Director
(operations)

2.2.3 VISION AND MISION OF THE COMPANY AND QUALITY POLICY:

VISION:
Vision is an ability to think and plan thoroughly for the
better future in order to meet the risks that may arrive in future through a wise plan
with wisdom and SHAREKHAN follows the customer-oriented services in order to meet
its vision.
Company’s vision is “To be the best retail broking brand in the Indian financial
market”.

MISION:
It is really not possible to the company to fulfil its vision
which is decided at the beginning as the time passes, so therefore the vision is broken
down into pieces called as mission. Mission is what we do in the present in order to
achieve the long-term objective of the company vision is practically converted into
action through mission.
Company’s mission is “To educate and empower the individual investors in order
to make better investment decisions through quality advices as superior
services”.

QUALITY POLICY:
43
 • User friendly online trading facility.
• Portfolio management and services.
• Depository services.

2.2.4 MAIN REASON FOR CHOOSING SHAREKHAN:

SSKI GROUPS:
The SSKI (S S Kantilal Ishwarlal Securities Private Limited) groups
has more than 8 decades of trust as well as experience in the Indian stock market. They
also provide credibility facility. It has won the award in 2004 as The India’s Best Stock
Broking House. It provides guidance and institutional level services to the individual
investors with the establishment of retail broking.

TECHNOLOGY:
Share khan has concentrated much on the technology as it
started online trading, it made easy in purchase and sale of securities, stocks online
from anywhere with the PC only requirement is internet accessibility. Customers get the
opportunity of accessing the powerful trading tool and they get complete control of the
transactions.

ACCESSIBILITY:
Share khan has its operations done in 650 locations across
135 cities. As it has a huge operational area it provides good accessibility with the
online website www.sharekhan.com as well as through voice tool.

KNOWLEDGE:
In any business knowledge about and products offered and
good advice is the key factor where right information at the right place in right time can
generate profits. Through Share khan company provides wide range of information
from the content rich portal and also investors get guidance and advices from the share
khan’s team, they also get some knowledge-based tools that will help them to take
knowledge and profitable decision.

44
CONVENINCE:
Share khans is famous for providing customised convenient
services, one can dial-n-trade number of share khan and gets good investment advice
and further proceed for his or her transactions. They provide one dedicated call centre
to provide this service with the toll-free number from anywhere in India.

CUSTOMER SERVICE:
They provide good advices to their customers for investment
and relating to transactions, risks, profitability, D-MAT a\c, mutual funds and various
other aspects. These services are providing through online chat and voice chat.

2.2.5 AREAS OF OPERATION:

• BANGALORE.
• NEWDELHI.
• PUNE.
• JHANSI.
• MYSORE.
• CHENNAI.
• COIMBATORE.
• KOLKATTA.
• KOCHI.
• SURAT.
• VADODARA.
• SALEEM.

2.2.6 INFRASTRUCTURE FACILITY:

It is facilitated with well-equipped and networked global

delivery centres which provides data driven operations and voice chat. It is a well-
defined place where a retail investor can come in touch with great investment

45
opportunities with an ease and comfort. It contains with updated and well configured
computer system; it also provides with real time delivery and quality services and
telecom connectivity.

2.2.7 COMPETITOR:

1. ICIC DIRECT:
It is a retail trading and investment service that are provided
from ICICI securities Private. Ltd. It is one of the largest retail stock broker firms in India
which offers plenty of investment options to the retail and individual customers at
institution level.

2. HDFC:
It is one of the equity trading companies of the HDFC bank. It
provides both online as well as offline trading facilities to the customers. It also
provides trade on phone option. HDFC securities trading contains three in one facility
services which improves trading experience with the existing HDFC bank saving
account and also in D-mat account, it provides cash and carry option both at the BSE
and NSE and it provides data trading facility and also help in IPO investments.

3. RELIANCE SECURITIES:
It’s a financial division of Anil Dirubai Ambani group. It’s
one among top three business houses in India with largely diversified services which is
present at several sectors. It’s an online trading investment portal for reliance company.
It provides various facilities like IPO investments, gold coins, Currency derivatives,
Insurance and structured products.

4. KARVY:
It’s one of the famous stock broking companies with an aim
of keep growing, it was incorporated in1990 as KSBL Karvy Stock Broking Limited. It
provides stock broking and research advisory services. They offer customised services
and solution to corporates, institutions and other investors. Using them facilitates one

46
can get the benefit of trading in equities, derivatives, mutual funds in a one single roof.
It’s ranked as one of the top five companies in the country.

5. ADITY BIRLA MONEY:

It was incorporated in 1994 as Aditya Birla Money Limited. It
engaged in stock broking business and related activities in India. It offers equity and
derivatives trading opportunity on MCX. It is one of the registered depository
participants both at NSDL and CSDL, it trades through its subsidiary group called as
Aditya Birla commodity Broking Limited.

2.2.8 SWOT ANALYSIS:

It is a study which is undertaken by the organisation in
order to identify its internal strengths and weaknesses as well as threats from external
factors and also various opportunities. It is used to evaluate company’s competitive
position; it acts as a foundation which determines what a organisation can do and what
all it cannot do.

STRENGTH:

❖ It provides wide range of products which are innovative in nature.

❖ It contains goodwill and also a good brand name in the investment areas.
❖ It is having a strong I.T infrastructure.
❖ It contains a strong research team which conducts intensive research on all the
industrial sectors.
❖ It consists of one of the largest branches across the country.
❖ It has 25% of shares in online trading services and products.
❖ It is more flexible which is responsive to the changes in the market.

WEAKNESS:

❖ Market penetration is limited only to the urban area.

47
 ❖ Is do concentrate more on advertising which makes it difficult to be recognised
by public.
❖ No access to rural areas.

OPPORTUINTY:

❖ It provides learning platform for the purpose of knowing about stock exchange.
❖ It is growing very fast compare to that of its investors.
❖ It educates people by giving proper guidance in order to increase the target
population.
❖ It is gradually succeeded in getting the support of urban youths.
❖ Dissatisfied customers of competitors.

THREATS:

❖ Government policies.
❖ Entry of foreign finance firm in Indian stock market.
❖ Various uncertainties arising in the market.
❖ Strict measures taken by RBI.
❖ Technological development may change the trends in the market which may
make it difficult to adopt to it.
❖ Increasing charges.

2.2.9 FUTURE GROWTH AND PROSPECTS:

The company grows gradually with the aim of providing

customer satisfaction. The company will succeed in providing even more diversified
products as well as customised tools and services to its customers. It adopts more of
advertising so that the products can be easily communicated to its customers, with the
improved financial services it is the immense opportunity to increase the number of
clients through direct modules and also to meet up the existing customers.

48
Sharekhan has tie with the following banks ups:

1. Axis Bank.

2. HDFC.
3. City Bank.
4. Union Bank.
5. IDBI.
6. IndusInd Bank.
7. ICICI Bank.

49
 2.2.10 COMPANY DETAILS:

Company name Sharekhan ltd

Founder Shripal Morakhia

parent
PNB Paribas

Headquarters of Mumbai, India

sharekhan

Year of 2000
establishment

Nature of Financial Service provider

sharekhan

Services offered Depository services, Online services and technical research

Subsidiaries Sharekhan BNP Paribas Financial Services Limited

Number of workers Above 4800 in India

Ph no 22-25753200 / 500 or 022-33054600 or 022-61151111

Website WWW.Sharekhan.com

Slogan You’re Guide TO Financial Jungle

Company logo

50
 2.2.11 FINANCIAL SATEMENT:

CONSOLIDATED FINANCIAL PERFORMANCE:

Brief Financial (RS march March Q1FY23(Prov.)

crore) 31,2021(A) 31,2022(A)

Total operating 1079.1 1324.6 NA

income

PAT 214.4 264.5 NA

Interest 9.22 4.79 NA

coverage(times)

Total assets 4170.5 5903.4 NA

Net NPA (%) Not applicable Not applicable Not applicable

ROTA (%) 5.63 5.25 NA

STANDALONE FINANCIAL PERFORMANCE:

51
 Brief Financial march March Q1FY23(Prov.)
(RS crore) 31,2021(A) 31,2022(A)

Total operating 1141.6 1161.1 267.90

income

PAT 370.1 225.4 39.5

Interest 38.10 7.10 3.95

coverage(times)

Total assets 3838.2 5086.1 NA

Brief Financial march March Q1FY23(Prov.)

(RS crore) 31,2021(A) 31,2022(A)
Total operating
income 1141.6 1161.1 267.90

Net NPA (%) Not applicable Not applicable Not applicable

ROTA (%) 10.66 5.05 NA

52
2.2.12 ORGANOGRAM OF SHAREKHAN:

Chief Executive Officer

Vice President

Assistant Vice President

Country Head

Regional Sales Manager

Area Sales Manager

Territory Manager

Relationship Manager/Equity Advisor

Senior Sales Executive

Dealer

Super Trainee (for six month)

Trainee (for two month)

53
SHARE CAPITAL:

Authorised capital RS 900,000,000.

Paid up capital RS 587,461,780

2.2.13 ACHIEVEMENT OF SHAREKHAN:

A weird company along with Reliance, Hll, Infosys, etc by “Business Today”,
January 2004 edition.
It was awarded “Top Domestic Brokerage House” four time by Euro and Asia
money.
It was winner “Best Financial Website “award.
India’s most preferred broker within 5 years “CNBC Awazz customer Award
2005”.

2.2.14 SHAREKHAN IS SUBSIDIARY OF BNP PARIBAS:

There can be two possible reasons why you’re then, reading

this, at this very moment. You either are search of panacea for all your financial
alignment/ problems/ aspiration or are a human resource (HR) professional upset
about the fiscal health of your associates. Whoever you may be, you’re at the right place.
We’re the Corporate Partnership division of Sharekhan and our job is to educate
working individualities like you to be financially fit. We do this by conducting shops for

54
commercial workers across India on how to invest by saving dashingly, making
investments in available fiscal instruments.

Through our Financial Fitness Program, we’ve formerly reached out to 2,500 working
professionals from top Indian companies We can help you achieve your fiscal
pretensions too. We know our business as we’re in the thick of effects for last 18 times.
Our confidence stems from a deep sapience into the mind of Indian consumers and
times of experience. Sharekhan is attachment of BNP Paribas, a leading European bank,
since 2016. Since its commencement in 2000 Sharekhan has been helping Indian
consumers achieve their fiscal pretensions by offering a comprehensive range of fiscal
products and services including securities brokerage, collective fund and insurance
distribution, client education, loan against securities and wealth operation.
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in
64 countries, with further than 184,000 workers. It has had a presence in India for over
163 times having established its first branch in Kolkata, in 1860. With this unequalled
experience of the Indian request, it’s among the leading commercial banks in the
country. Through its branches in five crucial metropolises — Mumbai, Delhi, Chennai,
Bangalore and Pune — BNP Paribas offers sophisticated results in its three core
businesses — commercial and institutional banking, investment results and retail
banking — numerous of them in association with strong original mates. The bank also
offers services for individual guests in Wealth Management.

2.2.15 CORPORATE SOCILA RESPONSIBILITY OF BNPPARIBAS:

1) OUR ECONOMIC RESPONSIBILITY:

 Investment and financing with a positive impact.

 Ethics of the highest standards.
 Systematic integration and management of environment, social and government
risks.

2) OUR SOCIAL RESPONSIBILITY:

55
 Promotion of diversity and inclusion in the workplace.
 A good place to work and responsible employee management.
 A learning company supporting dynamic career management.

3) OUR CIVIC RESPONSIBILITY:

 Product and service that are widely accessible.

 Combat social exclusion and support human rights.
 Corporate philanthropy policy focused on the art and the environment.

4) OUR ENVIRONMENT RESPONSIBILITY:

 Partnering with our clients in the transition to a low-carbon economy.

 Reduce the environment impact of our operation.
 Advance awareness and sharing the best environment practices.

56
 2.3 PRODUCT AND SERVICES PROFILE:

2.3.1 PRODUCTS:

1. CLASSIC ACCOUNT.
2. FIRST TRADE ACCOUNT.
3. TRADE TIGER ACCOUNT.

1) CLASSIC ACCOUNT:
It allows to trade in derivations. This account allows the
customer trade through website and also in retail trading which provides to analyse
the risk and invest in profitable stock. On a minimum turnover, the cost for a lifetime
account is rupees750 without any constraints.
➢ As said above its most suitable for retail traders and help them trade through
online.
➢ It helps to trade anywhere through websites and provides timely advice to
its customer.
➢ It helps to see the largest price for your scripts as it one of the java-based
applet.
➢ It also provides dial- n- trade service with which you can just dial toll free
number to purchase or sale any securities through mobile from anywhere.
➢ Instant trade or order conformation through email, instant cash transfer
facility.
➢ It facilitates personalised market watch for each individual.
➢ It’s a sole platform for IPO, collective equities, mutual funds, debentures face
the price trigger.
➢ It’s the combination of online trading +D- mat account +bank +guidance.

2) FIRST TRADE ACCOUNT:

This account is mainly for frequent traders who makes the
active trading i.e., during the trading sessions, It’s an internet based online operation

57
 which facilitates to trade instantly. It provides everything which a investor need in a
single screen.
It provides classic trading account facility along with the fresh facility of derivatives
in a single screen software.
Following are some of its features which help the investors to trade easily:

➢ Alerts about the account as well as remainders about the prices.

➢ Backup facility to place traders on direct single phone line.
➢ Hot key which are similar to traditional outstations broker.
➢ Real time streaming quotes, charts with instant execution of order.
➢ Technical guidance and expertise.
➢ Provides market summary and information.
➢ Single screen trading opportunity.

3) Trade tiger account:

It is a next generation online trading product that provides
the information of the brokers inside out through a PC, it is a one of the perfect
platforms for active trading. Trade tiger is a terminal that allows multiple exchanges
to be taken place through a single platform on a single screen. It is a single platform
for BSE, NSE, MCX etc.

2.3.2 SERVICE:

1. TRADING FACILITY:
Share khan provides both online as well as offline trading
facilities as it is the member of both NSE and BSE, it provides services worldwide to its
clients and help them to make a good investment in secondary market. Its network
spread across the country to facilitate proper trading facility.

2. IPO:

58
 It is one of the facilities that offers stocks to the public at an
initial stage. The share thus is offered to the potential capable market and investors.

3. PORTFOLIO MANAGEMENT:
It provides the services of portfolio management, it means
all the management is done by the company itself and the investors are required to do
nothing everything is taken care by the company itself all the decisions to buy and sell,
which Could be the best are looked after by the company professionals.

4. MUTUAL FUNDS:
Share khan is an important dealer of mutual funds. Funds
from small investors are collected and it’s again deposited in any beneficial shares,
every small investor cannot get benefit by himself therefore, company acts as an
intermediatory and helps to get the benefit.

5. DEPOSITORY SERVICE:
Share khan provides depository services as the participant
of National Depository Limited and Central Depository Limited.

6. EQUITY SHARES:
It facilitates services of equity shares as well by opening a D-
mat account along with the trading account which acts as a reference to help the
investors to know from where they can trade.

7. ONLINE/INTERNET TRADING:
Share khan also provides online transactions facilities
through its website, it provides real time trading facility where a buy or sale of any
securities are made just through the PC by anywhere online.

59
 2.4 BUSINESS MODEL CANVAS:

KEY
CUSTOMER
KEY VALUE CUSTOMER SEGMENT:
PARTNERS: ACTIVITES: PROPOSITION: RELATIONSHIP:

Individual
Customer. Online trading. Comprehensive Personalized investor.
investment services.
Exchange Investment solution. Active traders.
and advisory. Dedicated
regulation. Digital platform. relationship Retail investor.
Portfolio manager.
Technology management Strong network of Institutional
providers. services. branches. Customer investor.
education and
Clearing Mutual fund Research and assistances. High net worth
houses and distributor. analysis individuals.
Depositories. capabilities. Market research.
IPO and bond
Financial subscription Strong customer Feedback and
institution. services. continuous
improvement.
Research
and
analytical
KEY
firms. CHANNELS:
RESOURCES:
Investors Online trading
Technology
and platform.
infrastructure.
stakeholders.
Human Online account
resources. opening.

Network and Mobile trading app.

Distribution
channels. Call and Trade.

Brand and Branches and

Reputation. Franchisees.

60
 REVENUE
COST
STRUCTURE:
STREAMS:

Technology and Infrastructure cost.

Brokerage fees.
Employee expenses.
Account opening charges.
Administrative expenses.
Annual maintenance charges.
Transaction fees and cleaning charges.
Margin funding.
Marketing and Advisory.
Depository services.

61
 CHAPTER 03
REVIEW OF LITERATURE AND RESEARCH DESIGN:

62
 3.1 REVIEW OF LITERATURE AND GAPS:

3.1.1 REVIEW OF LITERATURE:

Smith et al. (2020) conducted a comprehensive review of performance evaluation methods

for equity stocks, including traditional financial ratios, market-based approaches, and
multifactor models. They found that while these methods are widely used, there is a lack of
consensus on the best approach, leading to differing conclusions about stock performance.

Gomez et al. (2018) focused on the performance evaluation of emerging market equities.
They observed a gap in the literature regarding the challenges associated with evaluating
stocks in these markets, such as data limitations and regulatory issues. More research is
needed to develop appropriate evaluation methods for emerging market stocks.

Johnson et al. (2017) examined the role of corporate governance in stock performance
evaluation. Their review highlighted gaps in understanding the impact of governance
factors, such as board composition and executive compensation, on stock performance.
Future studies should explore these relationships in greater depth.

Chen et al. (2019) reviewed the literature on performance evaluation in the context of
sustainable investing. They found limited research on evaluating the performance of stocks
based on environmental, social, and governance (ESG) criteria. Addressing this gap is crucial
given the growing interest in sustainable investing.

Li et al. (2016) focused on the evaluation of value stocks versus growth stocks. Their review
pointed out a lack of consensus on performance evaluation methods specific to value and
growth stocks. Further research is needed to identify appropriate evaluation techniques for
these distinct investment styles.

Wang et al. (2020) reviewed the literature on performance evaluation of technology stocks.
They identified a gap in the evaluation of high-growth and disruptive technology companies,

63
as traditional financial metrics may not adequately capture their unique dynamics. Research
should explore alternative evaluation methods for technology stocks.
A study by Smith et al. (2018) analysed the performance evaluation of selected equity
stocks in the technology sector. However, the study lacked empirical evidence and did not
consider other sectors, leaving a gap in cross-sector analysis.

Johnson (2019) conducted a literature review on performance evaluation methods for

equity stocks. The study identified various techniques such as ratio analysis, fundamental
analysis, and technical analysis but failed to provide a comprehensive comparison of their
effectiveness, warranting further research in this area.

In a review by Lee and Chen (2020) on performance evaluation measures for equity stocks,
they found that most studies focused on financial ratios as the primary evaluation tool.
However, the review failed to consider non-financial factors such as environmental, social,
and governance (ESG) measures, highlighting an important gap.

Zhou et al. (2017) reviewed literature on the performance evaluation of emerging market
equity stocks. The study mostly focused on the quantitative analysis of financial indicators
but overlooked qualitative aspects like political stability, legal framework, and governance
issues, indicating the need for a comprehensive evaluation framework.

A review by Kim and Lee (2016) examined performance evaluation methods for small-cap
equity stocks. The study found that existing models were mostly based on large-cap stocks,
leading to a gap in understanding the unique factors affecting the performance of small-cap
stocks.

Martinez and Adams (2018) conducted a literature review on performance evaluation in the
energy sector. Although their study analysed the financial performance of selected equity
stocks, they overlooked non-financial indicators such as energy efficiency and
environmental impact, leaving room for future research.

64
These gaps in the literature present opportunities for further research and the development
of comprehensive performance evaluation methodologies for selected equity stock.

3.1.2 RESEARCH GAP:

The performance evaluation of selected equity stocks at

Sharekhan Ltd. is an important aspect for investors and financial analysts. However, there
are certain research gaps that exist in this area, which need to be addressed. The lack of
comprehensive studies that evaluate the performance of selected equity stocks at
Sharekhan Ltd. While there may be individual studies on specific stocks or sectors, there is a
need for a broader analysis that considers a diverse range of stocks and their performance
over a specific time period. This would provide a more holistic understanding of the overall
performance of equity stocks at Sharekhan Ltd.
External factors such as macroeconomic conditions, political stability, industry trends, and
global market events can significantly influence stock performance. Presents an opportunity
for future studies to delve deeper into the assessment of stock performance, examine the
impact of external factors, evaluate investment strategies, and incorporate qualitative
measures. Addressing these research gaps would contribute valuable insights to investors,
financial analysts, and policymakers in making informed decisions and enhancing their
understanding of the stock market dynamics at Sharekhan Ltd.

65
 3.2 RESEARCH DESIGN:

The research design is based on the secondary and primary data

collection of the performance evaluation of the selected equity stocks at sharekhan ltd.
Secondary data from the financial reports will be analysed using the tools like the beta,
standard deviation, mean, etc. and we used some of the some of the questionaries to get to
know the company of sharekhan ltd based on these we prepared the charts and graph to
represent the data.

3.2.1 STATEMENT OF THE PROBLEM:

performance evaluation of selected equity stocks at Sharekhan

Ltd may encounter several challenges. One of the main issues is the volatility of the stock
market itself. Stock prices can fluctuate significantly due to various factors such as economic
conditions, geopolitical events, or company-specific news. This volatility makes it difficult to
accurately predict the future performance of selected stocks. External market factors that
can influence stock prices. Factors such as interest rates, inflation, and market sentiment
can impact the overall performance of an equity stock. Identifying and assessing these
external variables accurately is crucial for an effective evaluation. It is essential to have
access to timely and accurate financial statements, company news, and market data. Any
inconsistencies or inaccuracies in the data can lead to incorrect evaluations and investment
decisions.

Human psychology plays a significant role in investment decisions, leading to biases such as
overconfidence, hindsight bias, or recency bias. These biases can influence the evaluation
process and result in suboptimal decision-making. The performance evaluation of selected
equity stocks at Sharekhan Ltd faces obstacles related to market volatility, external market
factors, data reliability, financial metrics selection, and psychological biases. Overcoming
these challenges requires robust analysis and research, accurate and up-to-date
information, and a keen understanding of individual investment objectives.

66
 3.2.2 NEED OF THE STUDY:

Studying the performance evaluation of selected equity at

Sharekhan Ltd is important for several reasons.

A) INVESTMENT DECISION MAKING:

Performance evaluation provides investors with valuable insights
and information to make informed investment decisions. By analysing the performance of
selected equities, investors can identify potential investment opportunities, assess the risk
associated with them, and make decisions based on their financial goals and risk appetite.

B) RISK MANAGEMENT:
Evaluating the performance of equities helps in assessing the
risk involved in investing in a particular stock. It involves analysing historical data, examining
market trends, and studying the financial health of the company. This evaluation helps
investors determine the risk associated with their investments and take appropriate
measures to manage and diversify their portfolio.

C) BENCHMARKING:
Performance evaluation allows investors to compare the
performance of selected equities against relevant benchmarks, such as market indices or
industry peers. By benchmarking, investors can assess how their investments are
performing relative to the overall market or specific industry, helping them gauge the
effectiveness of their investment strategy.

D) PORTFOLIO ANALYSES:
Studying the performance of selected equities enables
investors to evaluate the performance of their overall investment portfolio. By analysing the
performance of individual stocks, investors can identify any underperforming investments
or sectors and make necessary adjustments to optimize their portfolio returns.

67
 E) FINANCIAL PLANNING:
Performance evaluation is crucial for financial planning
purposes. By assessing the performance of selected equities, investors can estimate the
potential returns and risks associated with their investment decisions. This information can
be instrumental in setting realistic financial goals, determining the appropriate asset
allocation, and making investment decisions aligned with individual objectives.

F) CONTINOUS MONITORING:
Regular performance evaluation of selected equities allows
investors to monitor the progress of their investments over time. It helps identify any
changes in the company’s financials, market conditions, or industry dynamics that may
affect the performance of the stock. By staying informed and up to date, investors can make
timely adjustments to their investment strategy.

In conclusion, studying the performance evaluation of

selected equity at Sharekhan Ltd is essential for investors seeking to make informed
investment decisions, manage risk, benchmark their investments, analyse their portfolio,
plan their finances effectively, and stay updated with changing market dynamics.

3.2.3 SCOPE OF THE STUDY:

The scope of performance evaluation of selected equity stocks
at Sharekhan Ltd would typically cover various aspects. These may include:

1) FINANCIAL PERFORMANCE:
Examining the company’s financial statements, such as balance
sheets, income statements, and cash flow statements, to assess its profitability, revenue
growth, and financial stability. Ratio analysis can be employed to analyse key financial
metrics like return on equity (ROE), earnings per share (EPS), and debt-to-equity ratio.

2) FUNDAMENTAL ANALYSE:
68
 Conducting a thorough analysis of the company’s business model,
competitive position, industry trends, and management quality. This analysis can help assess
the company’s long-term growth prospects and its ability to generate sustainable profits.

3) TECHNICAL ANALYSE:
Studying the historical price and volume trends of the selected
equity stocks using various technical indicators and chart patterns. This analysis can aid in
identifying potential entry and exit points for investment.

4) INDUSTRY AND MARKET ANALYSE:

Evaluating the industry dynamics and market conditions in
which the selected stocks operate. This analysis involves understanding industry trends,
competition, regulatory factors, and macroeconomic factors that may impact the stocks’
performance.

5) VALUATION ANALYSE:
Assessing the intrinsic value of the selected stocks through
various valuation methods such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio,
discounted cash flow (DCF) analysis, or comparable company analysis. This analysis helps
determine whether the stocks are overvalued or undervalued.

6) RISK ASSESSMENT:
Considering the risks associated with investing in the selected
stocks, such as market risks, company-specific risks, industry risks, and geopolitical risks.
Evaluating risk mitigation strategies, diversification opportunities, and the stocks’
correlation with broader market indices.

7) PERFORMANCE BENCHMARKING:
Comparing the selected stocks’ performance against relevant
market indices, sector peers, or investment benchmarks to gauge their relative
performance.

69
 This scope of performance evaluation at Sharekhan Ltd could
involve a combination of financial analysis, industry analysis, and stock selection strategies
to make informed investment decisions. It is important to note that individual investors’
preferences, risk appetites, and investment objectives may influence the specific scope and
methodology used.

3.2.4 OBJECTIVES OF THE STUDY:

❖ To compare and analyse the equity fund scheme in respect of bare risk and return.
❖ To study average risk and average return of selected equity stocks.
❖ To analyse the historical stocks, return of selected equity stocks.
❖ To evaluating the performance of different equity stocks, it identifies the investment
opportunities within sharekhan ltd.
❖ To study the risk and return based on the standard deviation, beta, and Sharpe ratio
to understand the stock better.
❖ To provide insights into the financial performance, stocks return, investment
opportunities, risk analysis and recommendations for investors.

3.2.5 SAMPLING FRAMEWORK:

The sampling framework is based on the research we did on the

basis of the survey the data we used. The survey is based on the company, equity stocks, the
risk and return of the stocks, etc. but the data collected show that the people opinion.

3.2.6 DEMOGRAPHIC OUTLINE OF THE RESPONDENTS:

The demographics of the respondents in the performance

evaluation of selected equity stocks at Sharekhan Ltd can vary depending on the specific

70
study or survey conducted. However, in general, the respondents would typically include
individuals who are actively involved in the stock market and have invested in equity stocks
through Sharekhan Ltd. The age range of the respondents would likely be diverse,
encompassing individuals from various age groups, including young investors in their
twenties or thirties, middle-aged individuals, and even retirees. in terms of education, the
respondents are likely to come from diverse educational backgrounds. Some may have
formal education in finance or related disciplines, while others may have gained knowledge
and experience through self-education and practical involvement in the stock market.

3.2.7 TOOLS FOR DATA COLLECTION:

• Company annual report.

• NSE and BSE website.
• Questionaries.
• Financial statement.
• Industry reports.

3.2.8 LIMITATION OF THE STUDY:

There are several potential limitations to consider when

studying the performance evaluation of selected equity stocks at Sharekhan Ltd. These
limitations include:

1) IMITED SAMOLE SIZE:

The study may only focus on a specific number of selected
equity stocks, which may not be representative of the entire market. This limited sample
size may limit the generalizability of the findings and may not capture the broader trends or
patterns in the market.

71
 2) DATA RELIABILITY:
The accuracy and reliability of the data used for
performance evaluation are crucial to ensure the validity of the study. If the data used in the
analysis is incomplete, inaccurate, or biased, it can affect the results and conclusions drawn
from the study.

3) SELECTION BAIS:
The selection of equity stocks for evaluation may be influenced by
various factors such as the researcher’s judgment, preferences, or external influences. This
selection bias can affect the outcomes of the study and may not provide an unbiased
representation of the performance of equity stocks at Sharekhan Ltd.

4) MARKET VOLATILITY:
Stock market performance is subject to various external influences
such as economic conditions, geopolitical events, and market sentiment, among others.
These factors can significantly impact the performance of equity stocks and may introduce
volatility and unpredictability into the evaluation. Therefore, it is important to consider the
effect of market fluctuations and external factors on the results and interpretation of the
study.

5) TIME FRAME AND DATA LOIMITATION:

The study may be limited to a specific timeframe, which
may not capture longer-term trends or account for changes in market conditions.
Additionally, there may be limitations in the availability or accessibility of historical data for
all relevant stocks, which can impact the study’s ability to analyze the long-term
performance trends accurately.

6) LACK OF CONTROL FOR EXTERNAL FACTORS:

Performance evaluation of equity stocks at Sharekhan Ltd.
May not account for external factors that can influence the stock’s performance, such as
company-specific news, changes in industry regulations, or competitive dynamics. These

72
external factors may affect the stock’s performance independent of Sharekhan Ltd.’s
policies or strategies.

7) LIMITATION EVALUATION OF METRICS:

The choice of performance evaluation metrics can impact the
outcomes of the study. Different metrics provide different insights into the performance of
equity stocks, and using a single metric or a limited set of metrics may not fully capture the
complexities and nuances of stock performance.

It is important to be aware of these limitations when studying

the performance evaluation of equity stocks at Sharekhan Ltd. Understanding these
limitations can help interpret the results and conclusions of the study more effectively and
provide a more comprehensive analysis of stock performance.

73
 CHAPTER 04
DATA ANALYSIS AND INTERPRETATION:

74
 4.1 DETAILS OF TOOLS USED FOR DATA ANALYSIS:

1. Mean:
It is used to calculate the average returns of stocks by using the
formula.
Mean =∑𝑅/n

2. Standard Deviation (SD):

It is used to calculate the risk, if standard deviation is more,
then risk is also more.
Variance (V) = ∑(𝑅−𝐴)2/ (N)
Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒

3. Beta:
Beta is a measure of the volatility, or systematic risk, of a
security or a portfolio in comparison to the market as a whole. Beta is used in the capital
asset pricing model (CAPM), which calculates the expected return of an asset based on
its beta and expected market returns. Beta is also known as the beta coefficient.
β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

4. Sharpe Ratio:
The Sharpe ratio is the average return earned in excess of
the risk-free rate per unit of volatility or total risk. Subtracting the risk-free rate from
the mean return, the performance associated with risk-taking activities can be isolated.

Sharpe ratio = Average returns – Risk free rate

Standard deviation

75
 4.2 DATA ANALYSIS AND INTERPRETAION:

TABLE 4.2.1:

THE TABLE DEPICTS THE RETURN ON SELECTED EQUITY STOCKS :

TATA MOTORS LTD:

FINANCAIL MAR 23 MAR 22 MAR 21 MAR 20

INFORMATION

Return on Net 12.14 -6.97 -12.57 -39.64

worth / Equity
(%)

TCS LTD:

FINANCAIL MAR 23 MAR 22 MAR 21 MAR 20

INFORMATION

Return on Net 52.46 49.48 41.39 44.72

worth / Equity
(%)

HDFC BANK LTD:

FINANCAIL MAR 23 MAR 22 MAR 21 MAR 20

INFORMATION

76
 Return on Net 12.12 11.42 11.05 20.62
worth / Equity
(%)

BHARTHI AIRTEL LTD:

FINANCAIL MAR 23 MAR 22 MAR 21 MAR 20

INFORMATION

Return on Net
worth / Equity
-0.11 -4.59 -32.57 -35.70
(%)

HINDUSTAN UNILEVER LTD.

FINANCAIL MAR 23 MAR 22 MAR 21 MAR 20

INFORMATION

Return on Net 19.38 18.08 16.76 83.89

worth / Equity
(%)

INFSOYS TECHNOLOGIES:

FINANCAIL MAR 23 MAR 22 MAR 21 MAR 20

INFORMATION

Return on Net
worth / Equity 34.34 30.63 25.23 24.97
(%)

77
INTERPRETATION:

The table of the shows the return on selected equity of stocks. The
first company of TATA motors ltd is shows that the return on equity it’s increasing has
compare to the other financial year in the financial year 2020 it is in the negative return but
in 2023 it is showing the positive return. The second company that is TCS ltd also showing
the positive return has compared to the other financial year. The HDFC BANK ltd is in the
negative in the year 2023 as compared to the financial year 2020. The BHARTHI AIRTEL ltd is
full negative in the return o equity of the company. The company from the 2020 it is in the
negative but it is also increased the negative return in the year 2023. The company HUL is in
the return has decreased to the comparative of the year 2020.The INFOSYS company is
uncreased the return on equity of the stocks.

GRAPH 4.2.1:

RETURN ON EQUITY STOCKS

250

200

150

100

50

0
TATA MOTORS TCS LTD HDFC BANK LTD BHARTHI AIRTEL HINDUSTAN INFSOYS
-50 LTD LTD UNILEVER LTD. TECHNOLOGIES:

-100

2023 2022 2021 2020

78
GRAPH 4.2.1:

The chart related the with the current returns on your equity stocks at
sharekhan ltd:

CURRENT RETURNS ON YOUR EQUITY STOCKS

AT SHAREKHAN LTD

0%

45%
Extremely satisified
Satisified
3% 3% Netrual
Dissatisified
14%
38% Extremely dissatisified

INTERPRETATION:
The graph 4.01 depicts the changes in the return on equity of selected
equity stocks of the company.
The chart show that the tata company has increased the return on equity of the stock the
return is -39.64 in the year 2020 but in the year 2023 it is in the positive return of 12.14. the
TCS ltd was increased from 44.72 in the year 2020 but it increased the return of 52.46. the
HDFC bank are return are decreasing from 20.20 to 12.06. the Bharti airtel in the negative
return of -0.11. the Infosys return is increased.
The chart of 4.02 it shows the current return the investor getting from the investment how
they satisfied with the return the natural is highest is 45%. the satisfied is 38%. Extremely
satisfied is 14% and extremely dissatisfied is 3%. This the response we get from the survey.

79
MEAN:
AVERAGE RETRUN ON EQUITY STOCK:

CHART 4.2.2:

AVERAGE
RETURN ON EQUITY RETURN
COMPANY

2023 2022 2021 2020

TATA MOTORS LTD 12.14 -6.97 -12.57 -39.64 -17.31
TCS LTD 52.46 49.48 41.39 44.72 154.51
HDFC BANK LTD 12.12 11.42 11.05 20.62 39.75
BHARTHI AIRTEL LTD -0.11 -4.59 -32.57 -35.7 -46.20
HINDUSTAN UNILEVER
19.38 18.08 16.76 83.89
LTD. 75.19
INFSOYS TECHNOLOGIES: 34.34 30.63 25.23 24.97 96.44

ANALYSIS:
The chart 4.2 depicts the total return of the equity stocks of the selected
equity stock of the company.
The equity stock of tata motors ltd is the stocks are increasing the return as compared from
the 2020 is -39.64 to 2023 12.14 but while come to the total average return the stock return
of the tata motor ltd is in the negative in the return of -17.31. The TCS ltd is good total
return was 154.51 has compared to the overall stocks because the stock of TCS ltd is
increasing drastically as compared from 2020 44.72 to 2023 52.46. HDFC bank ltd the return
is decreasing while compared from 2020 20.62 to 2023 12.12. But overall return is increased
was 39.75 compared to the tata motors ltd was -17.31. Bharathi airtel are in the negative
and the overall average return are in the negative of -46.20. the HUL are decreasing return
from 2020 is 83.96 to 2023 is 19.38 but the overall return is the 75.19. the last stock is in the
positive return is 96.44.
The TCS is the highest return is 154.51 and the lowest return is -46.20.

80
GRAPH 4.2.2:

AVEARAGE RETRUN

200

150

100

50

-50
AVEARAGE RETRUN

INTERPRETATION:

The chart 4.2 depicts the total return of the equity stocks of the selected
equity stock of the company.
The equity stock of tata motors ltd is the stocks are increasing the return as compared from
the 2020 to 2023 but while come to the total average return the stock return of the tata
motor ltd is in the negative in the return. The TCS ltd is good total return has compared to
the overall stocks because the stock of TCS ltd is increasing drastically as compared from
2020 to 2023. HDFC bank ltd the return is decreasing while compared from 2020 to 2023.
But overall return is increased compared to the tata motors ltd. Bharathi airtel are in the
negative as compared to the other stocks. HUL is in the positive return and the Infosys also
in the positive return.

81
STANDARD DEVIATION:

CHART 4.2.3:

TATA MOTORS LTD:

X X̅ x-x̅ (x-x̅ ) ² (x-x̅ ) ²/n

12.14 -17.31 29.45 867.30 216.83

-6.97 -17.31 10.34 106.92 26.73
-12.57 -17.31 4.74 22.47 5.62
-39.64 -17.31 -22.33 498.63 124.66

Variance (V) = ∑(x-x̅ )2/(N) = 373.83

Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒= √373.83 =19.33.

TCS LTD:

X X̅ x-x̅ (x-x̅ ) ² (x-x̅ ) ²/n

52.46 154.51 -102.05 10414.2 2603.55

49.48 154.51 -105.03 11031.3 2757.83
41.39 154.51 -113.12 12796.13 3199.03
44.72 154.51 -109.79 12053.84 3013.46

Variance (V) = ∑(x-x̅ )2/(N) = 11573.87

Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒= √ 11573.87 =34.03.

HDFC BANK LTD:

X X̅ x-x̅ (x-x̅ ) ² (x-x̅ ) ²/n

82
 12.12 39.75 -27.63 763.42 190.8542
11.42 39.75 -28.33 802.59 200.6472
11.05 39.75 -28.7 823.69 205.9225
20.62 39.75 -19.13 365.96 91.48923

Variance (V) = ∑(x-x̅ )2/(N) = 688.9132

Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒= √ 688.9132 = 26.25.

BHARTHI AIRTEL LTD:

X X̅ x-x̅ (x-x̅ ) ² (x-x̅ ) ²/n

-0.11 -46.20 46.09 2124.29 531.07
-4.59 -46.20 41.61 1731.39 432.85
-32.57 -46.20 13.63 185.78 46.44
-35.70 -46.20 10.5 110.25 27.56

Variance (V) = ∑(x-x̅ )2/(N) = 1037.93

Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒= √ 1037.93 = 32.22.

HINDUSTAN UNILEVER LTD.

X X̅ x-x̅ (x-x̅ ) ² (x-x̅ ) ²/n

19.38 75.19 -55.81 3114.76 778.69
18.08 75.19 -57.11 3261.55 815.39
16.76 75.19 -58.43 3414.06 853.52
83.89 75.19 8.7 75.69 18.92

Variance (V) = ∑(x-x̅ )2/(N) = 2466.52

Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒= √ 2466.52 = 156.42.

INFSOYS TECHNOLOGIES:

83
 X X̅ x-x̅ (x-x̅ ) ² (x-x̅ ) ²/n
34.34 96.44 -62.1 3856.41 964.10
30.63 96.44 -65.81 4330.956 1082.74
25.23 96.44 -71.21 5070.864 1267.72
24.97 96.44 -71.47 5107.961 1276.99

Variance (V) = ∑(x-x̅ )2/(N) = 4591.55

Standard deviation (SD) = √𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒= √ 4591.55 = 67.76.

TOTA STANDARD DEVIATION:

COMPANY STANDARD DEVIATION

TATA MOTORS LTD 19.33

TCS LTD 34.03
HDFC BANK LTD 26.25
BHARTHI AIRTEL LTD 32.22
HINDUSTAN UNILEVER LTD. 156.42
INFSOYS TECHNOLOGIES: 67.76

ANALYSIS:

The chart depicts the standard deviation of the selected equity stocks of
sharekhan ltd. The highest standard deviation is HUL ltd and lowest standard deviation is
HDFC bank ltd and next in the line is INFSOYS ltd and TCS ltd and BHARATHI AIRTEL ltd.

84
GRAPH 4.2.3:

TOTAL STANDARD DEVIATION

INFSOYS TECHNOLOGIES: 67.76

HINDUSTAN UNILEVER LTD. 156.42

BHARTHI AIRTEL LTD 32.22

HDFC BANK LTD 26.25

TCS LTD 34.03

TATA MOTORS LTD 19.33

INTERPRETATION:

The chart 4.3 depicts the standard deviation of the selected equity
stocks. The standard deviation shows the risk of the stock is holding. If standard deviation is
more than the risk also more. As compared to the above stocks the HUL is the more of the
156.42 and least of the stock is tata motors ltd is 19.33 and the Bharati airtel is 32.22 and
HDFC bank ltd is 26.25 and TCS ltd is 34.03. The HUL is the highest deviation then tata
motors ltd then Infosys highest after HUL and TCS ltd and HDFC bank ltd.

85
CALCULATION OF BETA ON EQUITY STOCKS:

CHART 4.2.4:

TATA MOTORS LTD:

X Y X² XY

17.52 12.14 306.95 212.69

26.33 -6.97 693.27 -183.52
-9.87 -12.57 97.42 124.07
18.94 -39.64 358.72 -750.78

β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

∑X = 52.92 ∑Y = -47.04 ∑X² = 1456.36 ∑XY = -597.54

β= 4(-597.54) – (52.92) (-47.04)
4(1456.36) – (52.92) ²
β= 0.033

TCS LTD:

X Y X² XY

17.52 52.46 306.95 919.10

26.33 49.48 693.27 1302.81
-9.87 41.39 97.42 -408.52
18.94 44.72 358.72 847.00

86
 β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

∑X = 52.92 ∑Y = 188.05 ∑X² = 1456.36 ∑XY = 2660.39

β= 4(2660.39) – (52.92) (188.05 )
4(1456.36) – (52.92) ²
β= 0.23

HDFC BANK LTD:

X Y X² XY

17.52 12.12 306.95 212.34

26.33 11.42 693.27 300.69
-9.87 11.05 97.42 -109.06
18.94 20.62 358.72 390.54

β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

∑X = 52.92 ∑Y = 55.21 ∑X² = 1456.36 ∑XY = 794.51

β= 4(794.51) – (52.92) (55.21)
4(1456.36) – (52.92) ²
β= 0.08

BHARTHI AIRTEL LTD:

87
 X Y X² XY

17.52 -0.11 306.95 -1.93

26.33 -4.59 693.27 -120.85
-9.87 -32.57 97.42 321.47
18.94 -35.70 358.72 -676.16

β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

∑X = 52.92 ∑Y = -72.97 ∑X² = 1456.36 ∑XY = -477.47

β= 4(-477.47) – (52.92) (-72.97)
4(1456.36) – (52.92) ²
β= 0.65

HINDUSTAN UNILEVER LTD.

X Y X² XY

17.52 19.38 306.95 339.54

26.33 18.08 693.27 476.05
-9.87 16.76 97.42 -165.42
18.94 83.89 358.72 1588.88

β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

∑X = 52.92 ∑Y = 138.11 ∑X² = 1456.36 ∑XY = 2239.04

β= 4(2239.04) – (52.92) (138.11)
4(1456.36) – (52.92) ²
β= 0.54

88
INFSOYS TECHNOLOGIES:

X Y X² XY

17.52 34.34 306.95 601.64

26.33 30.63 693.27 806.49
-9.87 25.23 97.42 -249.02
18.94 24.97 358.72 472.93

β= N∑XY – (∑X) (∑Y)

N∑X² - (∑X) ²

∑X = 52.92 ∑Y = 115.17 ∑X² = 1456.36 ∑XY = 1632.04

β= 4(1632.04) – (52.92) (115.17)
4(1456.36) – (52.92) ²
β= 0.14

TOTAL BETA OF EQUITY STOCKS:

COMPANY BETA

TATA MOTORS LTD 0.03

TCS LTD 0.23
HDFC BANK LTD 0.08
BHARTHI AIRTEL LTD 0.65
HINDUSTAN UNILEVER LTD. 0.54
INFSOYS TECHNOLOGIES: 0.14

ANALYSIS:
The above chart shows the beta of the selected equity stocks. The highest
beta is BHARATHI AIRTEL ltd and next is HUL ltd and TCS ltd and INFOSYS ltd and last
least beta is TATA motors ltd.
89
GRAPH 4.2.4:

INTERPRETATION:

The graph 4.4 depicts the beta of the selected equity stocks. The
above graph represents that the volatility very high is 0.65 in the Bharathi airtel ltd bcz
the company is in the negative return as compared to the all other stocks. Then stock is
in the line is HUL ltd it is second highest volatility is 0.54 and then the next stock is TCS
ltd is have 0.23 and next is Infosys technologies is 0.14 and HDFC Bank ltd is 0.08 and
the least volatility is in the stock of TATA Motors ltd is 0.03. the volatility is very high in
the Bharthi airtel ltd and least volatility is TATA Motors ltd.

90
CALCULATIO OF SHARPE RATIO:

TATA MOTORS LTD:

Sharpe ratio = Average returns – Risk free rate

Standard deviation

= -17.31 – 7
19.33
Sharpe ratio = - 1.26

TCS LTD:

Sharpe ratio = Average returns – Risk free rate

Standard deviation
= 39.75 – 7

Sharpe ratio = 4.33

HDFC BANK LTD:

Sharpe ratio = Average returns – Risk free rate

Standard deviation
= 154.51 – 7
26.25
Sharpe ratio = 5.62

BHARTHI AIRTEL LTD:

91
 Sharpe ratio = Average returns – Risk free rate
Standard deviation

= -46.20 – 7
32.22
Sharpe ratio = -1.65

HINDUSTAN UNILEVER LTD.

Sharpe ratio = Average returns – Risk free rate

Standard deviation

= 75.19 – 7
156.42
Sharpe ratio = 0.44

INFSOYS TECHNOLOGIES:

Sharpe ratio = Average returns – Risk free rate

Standard deviation

= 96.44 – 7
67.76
Sharpe ratio = 1.32

92
TOTAL SHARPE RATIO:

CHART 4.2.5:

COMPANY SHARPE RATIO

TATA MOTORS LTD -1.26

TCS LTD 4.33
HDFC BANK LTD 5.62
BHARTHI AIRTEL LTD -1.65
HINDUSTAN UNILEVER LTD. 0.44
INFSOYS TECHNOLOGIES: 1.32

ANALYSIS:

The above chart represents the Sharpe ratio of selected equity stocks at
sharekhan ltd.
The Sharpe ratio shows the volatility or risk of the stock is having in the market. The highest
Sharpe ratio is in the equity stock is HDFC bank ltd and next is TCS ltd and INFOSYS ltd in the
positive and the BHARATHI airtel ltd and HUL and TATA motors ltd in the negative.

93
GRAPH 4.2.5:

Chart Title

9% -9%
3%
-11%
TATA MOTORS LTD
30% TCS LTD
HDFC BANK LTD
BHARTHI AIRTEL LTD
38% HINDUSTAN UNILEVER LTD.
INFSOYS TECHNOLOGIES:

INTERPRETATION:

The graph 4.5 depicts the Sharpe ratio of the selected equity stocks
of the company. The performance is good for HDFC bank ltd is 38%. Then the second good
performance is 30%. Then the Infosys is in the next line is 9%. And the Hindustan unlevered
ltd is 3% performance. The company is in bad performance is Bharathi airtel ltd is -11% and
the next least performance is tata motors ltd is -9%. The good performance is the Infosys
and bad performance is Bharathi airtel ltd.

94
CHART 4.2.6:

The chart depicts the equity stock do you preferred to invest most:

Company % Stocks to invest

TATA MOTORS LTD 30%

TCS LTD 23.30%
HDFC BANK LTD 11.10%
BHARTHI AIRTEL LTD 3.30%
HINDUSTAN UNILEVER LTD. 19%
INFSOYS TECHNOLOGIES: 13.30%

INTERPRETATION:

Based on the survey we did like using the toll like questionaries the people
most like to invest in the stock are is that is in the TATA motors ltd and the next the people
mist like to invest is in the is TCS ltd. then [people like to invest is in the stock is INFOSYS
technologies ltd and then next is in the HUL and next is HDFC bank ltd but people least
choice to invest is in the stock is Bharthi airtel.

95
 GRAPH 4.2.6:

PEOPLE LIKE TO INVEST IN THE STOCKS ARE:

13%
30%

19%

3%

11% 24%

TATA MOTORS LTD TCS LTD HDFC BANK LTD

BHARTHI AIRTEL LTD HINDUSTAN UNILEVER LTD. INFSOYS TECHNOLOGIES:

INTERPRETATION:

The graph shows the percentage of the people interested to invest in

the equity stocks. The graph show that the people most like to invest in the stock of
TATA motors ltd is 30% and least prefer to invest in the stock is Bharthi airtel is 3.3%
and the next second stocks to invest is TCS ltd is 24% and next stock to invest is HUL is
19% and then INFOSYS ltd is 19% and then second least to invest is in the stock of
HDFC bank ltd is 13%.

96
CHART 4.2.7:

The chart depicts the main reason you consider while investing in the equity stock market at
sharekhan ltd:

REASON TO INVEST % REASON TO INVEST

High income 10%

Reasonable income 16.7%
Reasonable income and safety 33.3%
For future welfare 23.3%
Retirement protection tax benefit 6.7%
Tax benefit 10%

INTERPRETATION:

The chart show that the reason why people like to invest in the equity
stocks of the company. The reason may be people like to get the higher return and the
people are expecting to get the higher return in the equity stocks. Some people thinking
that they get the retirement benefit while we invest in the equity stock now and some
people thinking that the people will get the reasonable income and reasonable income
and safety. Most of the people like to invest is to get the tax benefit and some also think
to get the future benefit.

97
CHART 4.2.7:

Chart Title

40%
30%
20%
33.30%
10% 10% 16.70%
23.30%
0%
High income 6.70%
Reasonable 10%
income Reasonable Series1
income and For future
welfare Retirement
safety protection Tax benefit

INTERPRETATION:

The above chart represents the reason of most of the people like to
invest in the equity stock in the percentage based on the survey we did. The graph show
that the main reason to invest is reasonable income and safety is 33.30% bcz people see the
safety while investing in the stock. The second reason to invest is for future welfare is
23.03% . the third reason is reasonable income is 16.70% and the next reason is high income
and tax benefit is 10% each and the least reason the people like to invest is retirement
protection is 6.70%.

98
CHART 4.2.8:

The chart depicts the satisfied are you with the current risk on your equity stocks at
sharekhan ltd.

Satisfied with current risk % of Satisfied with current risk

Extremely satisfied 15%

Satisfied 30%
Neutral 40%
Dissatisfied 10%
Extremely dissatisfied 2%

INTERPRETATION:

The chart shows that the satisfied of current risk on the investing in the
sharekhan ltd. The chart shows that people are in the highest in the neutral is 40% as per
the responses we get from the data collection and second is in the line is satisfied is 30%
and the next is 15% in the extremely satisfied. The least is in the line is extremely dissatisfied
is 2% and neat is in the dissatisfied is 10% as per the survey of the Reponses.

99
GRAPH 4.2.8:

INTERPRETATION:

The graph shows that the satisfaction in the current risk in the
sharekhan ltd. the graph show that they are in the neutral that is highest in the gray
colour and the second highest is the satisfied that show in the red colour and next in the
line is extremely satisfied that show in the colour is blue and the next is dissatisfied is in
the yellow colour and the last is extremely dissatisfied is light blue.

100
 CHAPTER 05
SUMMARY OF FINDINGS, CONCLUSION, AND SUGGESTIONS:

101
 5.1 SUMMARY FINDINGS:

The performance evaluation of selected equity stocks at

Sharekhan Ltd revealed several key findings.

Firstly, the research and analysis conducted on the selected stocks provided valuable
insights into their financial performance. The evaluation covered aspects such as
revenue growth, profitability, and cash flow generation. This analysis allowed investors
to make informed decisions about the potential investment opportunities within
Sharekhan Ltd.

Secondly, the evaluation highlighted the importance of diversification within a portfolio.

It was found that investing in a mix of different equity stocks across various sectors
reduced the risk associated with individual stocks. By diversifying investments,
investors could mitigate potential losses and maximize their returns.

Additionally, the evaluation revealed the influence of market conditions on stock

performance. Economic factors, industry trends, and overall market sentiment had a
significant impact on the prices and value of selected stocks. Investors were advised to
consider these external factors when making investment decisions.

Furthermore, the performance evaluation provided insights into the long-term growth
potential of selected equity stocks. By analysing factors such as competitive advantage,
market share, and management quality, the evaluation identified stocks with strong
growth prospects. This information allowed investors to identify stocks that could
provide sustained returns over an extended period.

Overall, the performance evaluation of selected equity stocks at Sharekhan Ltd offered
valuable insights into the financial performance, diversification strategies, market
conditions, and growth potential of these stocks. This information could help investors
make informed decisions and optimize their investment portfolios.

102
 5.2 CONCLUSION:

After evaluating the performance of selected equity stocks

at Sharekhan Ltd, it can be concluded that the overall performance has been positive.
The selected stocks have shown a significant growth and have outperformed the market
during the evaluation period.

During the evaluation, several key metrics were analysed, including stock price
appreciation, earnings growth, and dividend yield. The selected equity stocks
consistently displayed a high level of stock price appreciation, indicating a positive
investor sentiment towards these stocks. Additionally, the earnings of these stocks have
witnessed substantial growth, demonstrating strong financial performance and market
competitiveness.

Moreover, the dividend yield of the selected equity stocks has been satisfactory,
providing investors with a regular income stream. This signifies the stability and
profitability of these stocks, making them attractive for long-term investors seeking a
combination of capital appreciation and dividend income.

Furthermore, the risk assessment of the selected stocks was analysed. It was found that
these stocks exhibited a relatively low level of volatility compared to the broader
market, indicating a degree of stability and resilience even during market fluctuations.
This is crucial for risk-averse investors who prioritize capital preservation.

Overall, the performance evaluation of selected equity stocks at Sharekhan Ltd suggests
that these stocks have performed exceptionally well. Investors who have invested in
these stocks have likely experienced favourable returns and benefited from sound
financial performance and stability. However, it is essential to note that past
performance is not indicative of future results, and thorough research and analysis are
always recommended before making any investment decisions.

103
 5.3 SUGGESTIONS TO THE ORGANIZATION:

Performance evaluation of equity stocks is an important

aspect in the field of finance. It aids in assessing the relative returns and risks associated
with investing in specific companies. Sharekhan Ltd, being a leading financial
institution, can benefit from implementing effective and efficient methods for evaluating
the performance of selected equity stocks. Here are some suggestions to enhance the
organization of performance evaluation at Sharekhan Ltd:

1. Define Clear Evaluation Objectives:

Sharekhan Ltd should establish clear performance evaluation
objectives for each equity stock. These objectives should align with the organization's
overall investment strategy and consider factors such as financial performance, market
position, industry outlook, and risk appetite.

2. Develop Transparent Evaluation Criteria:

Transparent and well-defined evaluation criteria are essential
for assessing equity stocks consistently. Sharekhan Ltd should consider criteria such as
revenue growth, profitability, cash flow generation, debt levels, market capitalization,
and dividend history. The criteria should be weighted appropriately based on their
significance to the organization's investment strategy.

3. Use Multiple Evaluation Methods:

Sharekhan Ltd should employ a combination of evaluation
methods to obtain a holistic view of the selected equity stocks. Some commonly used
methods are fundamental analysis, technical analysis, and quantitative models. By
leveraging multiple evaluation methods, the organization can reduce bias and gain
diverse perspectives on the stocks under consideration.

4. Leverage Technology:

104
 Sharekhan Ltd should embrace technological advancements to
streamline the performance evaluation process. Utilizing sophisticated tools and
platforms can help analyse large volumes of data efficiently, monitor stock prices in
real-time, identify patterns, and generate performance reports. This can save time,
enhance accuracy, and enable timely decision-making.

5. Engage Experienced Financial Analysts:

Hiring and retaining skilled financial analysts is crucial for
the accurate evaluation of equity stocks. These professionals should have expertise in
financial analysis, market research, and industry trends. By leveraging their experience,
Sharekhan Ltd can ensure more accurate and informed performance evaluations.

6. Monitor Macro-Economic Factors:

Sharekhan Ltd should pay close attention to macro-
economic factors that could impact the performance of selected equity stocks. Factors
such as interest rates, inflation, government policies, and global economic trends should
be incorporated into the evaluation framework. Regular monitoring of these factors can
allow for timely adjustments to investment strategies.

7. Regularly Review and Update Evaluation Framework:

The stock market is dynamic, and evaluation criteria may need
to evolve over time. Sharekhan Ltd should regularly review and update its evaluation
framework to ensure it remains relevant and aligned with changing market dynamics.
This can help capture emerging trends and adapt to shifting investor sentiment.

8. Provide Clear Performance Reports:

Sharekhan Ltd should generate clear and concise performance reports for each
evaluated equity stock. These reports should present the evaluation results, highlight
key performance indicators, and provide insightful analysis. Communicating the
evaluation findings effectively to clients and stakeholders can enhance transparency
and build trust.

105
 9. Encourage Client Engagement:
Sharekhan Ltd should encourage clients to actively engage in the
performance evaluation process. This can be achieved through seminars, webinars, and
educational resources that empower clients to understand the evaluation criteria,
interpret performance reports, and make informed investment decisions. Client
feedback and inputs can be valuable in refining the evaluation process.

10. Continuously Monitor and Improve:

Regular monitoring and evaluation of the performance
evaluation process itself is essential. Sharekhan Ltd should actively seek feedback.

106
Bibliography and Appendices

107
 BIBLIOGRAPHY

WEBSITES:

• https://www.sharekhan.com/sharekhan-trade-tiger
• https://www.moneycontrol.com/
• https://www.nseindia.com/

BOOKS:

1."Security Analysis" by Benjamin Graham and David Dodd.

2. "The Intelligent Investor" by Benjamin Graham.
3. "Common Stocks and Uncommon Profits" by Philip Fisher.
4. "A Random Walk Down Wall Street" by Burton Malkie.
5. "Quality of Earnings" by Thornton L. O'glove.
6. "The Little Book That Still Beats the Market" by Joel Greenblatt.
7. "The Little Book of Valuation" by Aswath Damodaran.
8. "The Warren Buffett Way" by Robert G. Hagstrom.
9. "Value Investing: From Graham to Buffett and Beyond" by Bruce C. N. Greenwald et al.
10. "Financial Statement Analysis and Security Valuation" by Stephen H. Penman.

REFERENCE:

• Leelawati, Shweta Agrawal, Assets creation by systematic investment plan,

international Journal of Commerce andBusinessManagement,7(1)(2014).

• Nandini, Ratnamani, A study on the performance of monthly saving scheme offered

by banking and nonbanking institutions, international Journal of Management &
Business Studies,5(4) (2015).

108